Israeli companies will likely participate
in the new Cypriot gas tenders. The Cypriot government has published tenders
for 12 offshore blocks in its exclusive economic zone.
Delek Group Ltd.
(TASE:DLEKG), controlled by Yitzhak Tshuva, already owns 30% of
the rights to the Block 12 concession, which it acquired byNoble Energy Inc.(NYSE:NBL) last year. The
Block 12 discovery totals seven trillion cubic feet of natural gas.
Israeli companies
mentioned as possibly interested in the Cypriot tenders include Delek, Shemen
Oil and Gas Resources Ltd. (TASE:SMOG), Ratio Oil Exploration (1992) LP (TASE:RATI.L), Isramco Ltd. (Nasdaq:ISRL; TASE:ISRA.L), and Alon Natural Gas Exploration Ltd. (TASE:ALGS).
On Saturday, the Cypriot
government published requests for bids in the second round of tenders for
offshore gas and oil exploration concessions in the official journal of the
European Union and on the Cypriot government gazette and Ministry of Commerce
website. The applicants have 90 days to search for mineral deposits inside the
island's 51,000-square kilometer EEZ. The Cypriot government is offering
concessions to Blocks 1 to 11, and Block 13, located to the south of the
island. Block
12 is close to Israel's Leviathan and Tamar discoveries.
When Cyprus published its first tender for offshore gas
exploration in 2007, Noble Energy was the only company to bid. Cypriot
officials are now confident that the new tenders will draw far greater
attention following natural gas discoveries in the Levant Basin.
In September, Cypriot Energy Service director Solon Kassinis
told "Globes" that natural gas reserves in Cyprus's EEZ could total
100 trillion cubic feet and that there might also be hundreds of millions of
barrels of oil.
The new notice is for the "granting and using
authorizations for the prospection, exploration and production of
hydrocarbons." Solon told "Cyprus Mail" that exploration
licenses would be initially awarded to successful bidders. "If a bidder
makes a discovery, they would be granted a subsequent license for
exploitation."
The "Cyprus Mail" added that Cyprus's ministries
of foreign affairs and commerce were in the final stages of negotiating a
unitization agreement with Israel. This would arrange gas prospects into
discrete units, given that some of the Cypriot prospects in the eastern
Mediterranean border and/or overlap Israeli ones.
Israeli companies have an edge, as they already possess
geological information about the Levant Basin, which includes Israeli and
Cypriot waters in the Eastern Mediterranean. On the other hand, big oil
companies have the advantages of size and wherewithal, as well as political
ties with the Cypriot government. Russia's Gazprom has already announced that
it will participate in the tenders.